Arie Egozi/TEL AVIV

Israeli flag-carrier El Al is to undertake a major reorganisation of its operations this year in response to the fall in traffic due to the recent turmoil in the country.

A business plan based on the crisis has been approved by El Al's board. The crisis has resulted in a 50% decrease in the airline's passenger traffic. The airline forecasts a 30% fall in passengers numbers (mainly tourists) over the next 12 months.

The plan is based on a more focused network strategy which will include adding flights to high- yield destinations, and fewer flights on thin routes, or even the suspension of certain services.

Around 300 employees will be laid off as part of a special compensation programme. The airline is also reducing its overseas workforce by 10%, and other steps will be taken to reduce costs.

At least three of its widebody passenger aircraft will be phased out earlier than originally planned - probably two Boeing 747-200s and one 767-200. The first of three new 777-200ERs will arrive next month, with the other two following in March and May.

Meanwhile, the Israeli carrier may further reduce its cargo fleet in response to new steps in the Israeli Government's open skies policy. This policy resulted in the setting up of Israeli private carrier Cargo Airlines (CAL) in 1999 when it began operating its own 747 freighter after previously using El Al aircraft. A second 747F is about to be added to its fleet.

The Israeli transport ministry recently decided to set up a committee to evaluate a change in regulations, to allow passenger charter flights to carry cargo in aircraft bellies.

In reaction to the policy, El Al recently sold one of its three747-200 convertible aircraft to Hydro Air of South Africa. The airline continues to operate the two convertibles and two 747-200s in cargo configuration.

According to an El Al source, the proposed changes in the regulations may force the airline to further decrease its cargo capacity. Such a move could face opposition from the government, as the Ministry of Defence requires El Al to keep a minimum level of cargo capacity for national defence emergencies.

Source: Flight International